Bathurst seeks capital as resource consents loom

Bathurst Resources is seeking to raise as much as $20 million in one-off book building exercise that offers long-suffering shareholders a chance to gamble on a rising share price after the imminent granting of resource consents for its Escarpment mine on the Denniston Plateau.

The Wellington-headquartered company's share register is dominated by Australian shareholders, many of whom have been frustrated by the length of appeals processes against the Escarpment development.

Bathurst shares last traded at 20 cents apiece, having listed on the NZX in November 2010 at 74 cents and rising in May 2011 as high as $1.70.

Resource consents were initially granted for the mine in August 2011, but appeals led by the Royal Forest & Bird Protection Society of New Zealand have kept the project in the courts ever since.

However, a High Court ruling last month indicated consents would likely be granted within weeks, albeit one Supreme Court appeal is outstanding and another bid to take a side issue to the Supreme Court has yet to be ruled upon.

Bathurst shares were placed in a trading halt on the NZX and ASX this morning "pending the conduct of a bookbuild process for a proposed capital raising". The bookbuild is occurring today, with the shares to be requited tomorrow after results of the exercise are known.

"We are continually being commented on as understanding," chief executive Hamish Bohannan told BusinessDesk. The capital raising now was an opportunity to deal with that perception.

The bookbuild cannot raise more than 15 per cent of the market capitalisation of the company, which documents issued to the NZX put at $139.8 million, making the upper limit for the capital-raising at $20.97 million.

The company has net cash on hand of $8 million and says it will need $13.3 million in year one of a plan to bring the export-focused coking coal operation at Escarpment into production, along with $6.6 million on domestic operations, which sell thermal coal to local consumers.

That would take Bathurst to 640,000 tonnes of coal production annually, while it would need to spend a further $70.5 million on its Buller coking coal plans in the second and third years, to take the company to one million tonnes of coal production annually.

Among investments required on the Denniston plateau, which environmentalists argue is a unique eco-system deserving preservation while Bathurst supporters point to mining in the area for more than a century, is improved roading and construction of an aerial conveyor to take coal off the plateau for export either through New Plymouth via Westport or from Lyttelton.